Friday, 25 January 2013

The middle class is rising in a big way, especially in developing countries. About 42 per cent of workers, or nearly 1.1 billion, are now ‘middle-class’, living with families on over Rs 225 ($4-13) per person per day, says a new ILO report.

By 2017, the developing world could see the addition of 390 million more workers in the middle class, the International Labour Organisation (ILO) report says.

“Over time, this emerging middle-class could give a much needed push to more balanced global growth by boosting consumption, particularly in poorer parts of the developing world,” said Steven Kapsos, one of the authors of the Global Employment Trends 2013.

Employment growth

However, the report raises a red flag for employment growth in 2013-14, even if there is a moderate pick-up in output growth.

It estimates that the number of unemployed worldwide may rise by 5.1 million to more than 202 million in 2013 and by another 3 million in 2014, half-a-million of which will be youth.

“The indecision of policy-makers in several countries has led to uncertainty about future conditions and reinforced corporate tendencies to increase cash holdings or pay dividends rather than expand capacity and hire new workers,” says the report.

GDP growth

The ILO report noted that in India, growth in investment contributed 1.5 percentage points to the overall GDP growth over the past year, down from 1.8 percentage points in 2011, while the contribution from consumption declined to 2.8 per cent versus 3.2 per cent the previous year.

Job creation, labour productivity

For countries such as India, the report called for focus on both employment creation and labour productivity.

It noted that in India, even where jobs were created, a large number of workers remained in agriculture (51.1 per cent), in the urban informal sector or in unprotected jobs (contract) in the formal sector.

The share of workers in manufacturing was just 11 per cent in 2009-10, no higher than a decade earlier.

Like many regions, growth has failed to deliver a significant number of better jobs in the formal economy.

Formal employment

Most notably in India, the share of formal employment has declined from around 9 per cent in 1999-2000 to 7 per cent in 2009-10, in spite of record growth rates, it said quoting a study.

Using a comparable definition for the latest year available, the report said the share of workers in informal employment in the non-agricultural sector stood at 83.6 per cent in India (2009-10), 78.4 per cent in Pakistan (2009-10) and 62.1 per cent in Sri Lanka (2009).

Tuesday, 24 January 2012

India’s economic growth rate will remain subdued at 7.7 per cent in 2012 and 7.9 per cent in 2013, says a U.N. report.

“India’s economy is forecast to expand at a pace similar to 2011 in the following two years... at 7.7 per cent in 2012 and 7.9 per cent in 2013,” the U.N. report on ‘World Economic Situation and Prospects 2012’ said.

The report cautioned, “The downside risks to the regional outlook have sharply increased in recent months... particularly in case of India. Double-dip recessions in Europe and the United States would have a significant impact on economic activities across South Asia.”

The government recently lowered the GDP growth target for the current fiscal to 7 per cent from the earlier estimate of 8.5 per cent.

However, the study gave a positive outlook on South Asia’s economic growth prospects and projected that the region’s economies will grow by 6.7 per cent and 6.9 per cent in 2012 and 2013, respectively, accelerating beyond the 6.5 per cent growth rate experienced in 2011.

The report also raised a red flag on India’s fiscal deficit target, saying the Indian government is unlikely to achieve its deficit target of 4.7 per cent of the GDP for 2011-12 as lower growth has brought down tax revenues and disinvestment in state-run companies has been put on hold.

Nevertheless, the study has given a positive outlook for India’s job market, saying, “India is enjoying gains in employment rates.”

Saturday, 14 January 2012

The Finance Ministry will include a special chapter on financing of climate change in the Economic Survey, the Chief Economic Advisor, Mr Kaushik Basu, has said.

“This year we have decided to devote a special chapter on the topic of financing of climate change in the Economic Survey,” Mr Basu said while addressing a UNDP event.

Speaking at the event, the Economic Affairs Secretary, Mr R. Gopalan, said that the climate change issue is posing a challenge for the world.

“The challenges are both environmental and developmental.

Addressing climate change is a challenge for all humanity and it is in our interest that the world community address the issue effectively,” Mr Gopalan said.

He said there is a need to change the way we use natural resources and device new technology to meet the challenges.

As per the 2010-11 Economic Survey, India’s total carbon-di-oxide emissions were about 4 per cent of the global emissions. The survey also showed that it cost India 2.84 per cent of its GDP to adapt to climate change.

Studies show that even with 8-9 per cent GDP growth every year for the next decade, India’s per-capita emissions will be well below developed countries average.

Friday, 14 October 2011

Punjab, Himachal Pradesh and Haryana rank among the top 10 States in a report titled Sustainable Competitiveness Report 2011 for Indian States, released by Marcus Potter, executive director, developing markets, RICS. The report shows the ranking of Indian States in terms of the sustainability of their growth story.

The States have been divided into three categories based on the density of population and Delhi tops the sustainable competitiveness index in the high density States. Goa and Sikkim top the list for the medium and low population density States, respectively.

When seen as an overall ranking, the top three winners are Goa, Delhi and Sikkim, followed by Punjab, Himachal Pradesh, Haryana, Mizoram, Kerala, Gujarat and Arunachal Pradesh.

Among the laggards, West Bengal, Bihar and Jharkhand fared the worst. Heavyweight States such as Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra and Uttar Pradesh showed disappointing results.

The States sustainability competitiveness is accessed on four basic pillars, which include social inclusion, environment and climate change, economic development and resource availability and utilisation.

When seen against individual ranking parameters or categories, Delhi and Goa top the national rankings across the economic development and resource availability and utilisation categories, respectively.

On environment and climate change, it is Arunachal Pradesh that tops the national rankings, though overall the State ranks number 10. Mizoram ranks as the number one State nationally on social inclusion.